Mexican ID controversy on the way here (Memphis TN)

WASHINGTON -- The Mexican Consulate in Atlanta plans to set up a mobile office in Hickory Hill on Saturday to distribute the form of identity cards that U.S. Rep. Marsha Blackburn, R-Tenn., would prohibit using for opening bank accounts.

Blackburn introduced legislation earlier this week to close what she considers a loophole in banking regulations that permit banks to use the matricula consular card as part of the identification for opening a bank account and eventually obtaining credit cards. She has cited danger to financial institutions as a concern.

"Our preference would be to see the Mexican government join us in securing our borders and protecting the sovereignty of our two nations," Blackburn said in a prepared statement Thursday evening.

"Instead, the Mexican government continues to encourage illegal immigration and thumbing their collective noses at the rule of U.S. law by passing out these matricular cards. Legal immigrants don't need the matricular card, only illegals do. By issuing these cards, on U.S. soil and in broad daylight, the Mexican Consulate shows no remorse in encouraging illegals to break the law."

The use of the cards as identification as part of the documentation supporting applications to open bank accounts has been widely criticized since Blackburn went public last week.

Others suggest her legislation, the Photo Identity Security Act, is a solution in search of a problem. Banks are permitted to use a variety of forms of identification authorized by the U.S.A. Patriot Act and U.S. Treasury regulations, and make their own assessments of risk.

"(Banks) are in the risk business all the time," said John Mueller, chairman of national security studies at Ohio State University and author of "Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats and Why We Believe Them." "If they find that people using certain kinds of ID are very high risk, they'll either charge more or just not accept it. But I don't see why you'd need legislation to do it."

Mueller added that Blackburn's proposal appeared to "punish banks for some other kind of ideological goal."

Blackburn's office has been inundated with calls. A boycott of Bank of America, whose pilot program in Los Angeles County spurred the most vehement reaction, is under way.

Germantown business owner C.J. Phillips-Young, 59, called The Commercial Appeal on Thursday to say she took part. She said the branch manager at the Bank of America at Poplar and Shady Grove took her into a private office and asked her what it would take for her to not close her accounts. Phillips-Young said it would take a pledge that the bank would stop issuing credit cards to illegal immigrants. In reply, she said the branch manager handed her a cashier's check for the balance in her accounts.

Phillips-Young blamed Mexicans for Medicare and other federal benefits frauds, the spread of tuberculosis, and the cost of indigent medical care. "I just wonder how many we can take on," she said.

Kevin Mukri, a spokesman for the Office of the Comptroller of the Currency, said banking regulators prefer financial transactions to be done with the transparency required by regulated banks where activities can be monitored. He said banks have a spectrum of identification documents they can use to limit their risk.

"We have a lot of foreign nationals in this country doing business (with banks) on student visas and all kinds of different things," Mukri noted.

Tim Amos, general counsel for the Tennessee Bankers Association, has said banks will comply with the additional identification requirements if Congress imposes them, but he, too, is concerned about driving regulated money transfer programs endorsed by the Federal Reserve underground.

Pat Reilly, an Immigration and Customs Enforcement spokesman in Washington, said the Hickory Hill mobile consulate would not be the kind of magnet the agency looks for to arrest illegal immigrants.

"Absolutely not. That's a misconception about how we do our job," she said. "We do not patrol the streets, as some people have alleged, looking for large pockets of people who appear to be from elsewhere. ... You will not find evidence of us going to day labor sites or rallies or anything like that looking for doing an operation there."

A Mexican consular official said the mobile consulate expects to dispense 300 matricula consular cards and about 100 new or renewed passports to Mexican citizens holding the proper documents establishing nationality and current residency in Tennessee.

Melissa Durkin, an official with Latino Memphis, said the event is scheduled from 9 a.m. to 5 p.m. at its offices in the Appletree Center.

Last year, when mobile consulates set up in Eugene, Oregon, Colorado Springs, Colo., and elsewhere, small bands of anti-immigration Minutemen and other protesters gathered to complain.

A loophole put there intentionally by George W. Bush in 2001:

New Alliance Task Force:

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Federal Deposit Insurance Corporation of Chicago
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Without access to banking services, even small necessities, like paying rent, incur high costs. For the "unbanked," payments are often made with an expensive cashier's check and paychecks cashed through predatory services that charge high fees. It is difficult and dangerous to save money when it must be kept at home, increasing the incentive to consume and placing the purchase of houses, cars, and even most large appliances out of reach. For 75 percent of Mexican immigrants living in the United States--and nearly one third of immigrants from all Latin American countries--these difficulties are part of daily life.

As in other immigrant communities around the country, the large Hispanic community of Chicago, composed of recent documented and undocumented immigrants, faced such financial problems. Most were without banking services, paying high premiums to predatory financial businesses such as check-cashing services. Then, the Federal Deposit Insurance Corporation (FDIC) stepped in.

The FDIC branch in Chicago initially intended to fulfill one part of the 2001 "Partnership for Prosperity" agreement between the U.S. and Mexico. The agreement urged the U.S. to seek alternatives to the high-cost wire transfers to Mexico that many immigrants used to send money to families back home. Joining with the Mexican Consulate of Chicago, the FDIC created the New Alliance Task Force (NATF).

It was clear to members of the NATF that wire transfers were only the symptom of a larger problem: lack of access to financial services. Drawing on a coalition of 65 people from banks, mortgage industry representatives, community organizations, federal bank oversight agencies, and other government agencies, the NATF sought a comprehensive solution.

Four major working groups targeted specific problems; they addressed access to financial education, bank products and services, mortgage products, and social products. Each group developed specific strategies as well as programs to implement them.

In some cases, these solutions required dramatic change. Many immigrants lacked identification, which is usually required to open up even basic checking accounts. The NATF helped to sell the Matricula Consular card, issued by the Mexican consulate, as a valid form of banking identification. Partner banks began to accept income tax records to substantiate loan applications.

Other solutions employed common sense. Many in the immigrant population were suspicious of both banks and government presence in their lives. The NATF worked to overcome this by positioning bank representatives in the Mexican Consulate. As new immigrants waited in line for their identification cards, they heard about the benefits of banking.

The NATF's comprehensive programs helped nearly 160,000 immigrants to open bank accounts. Many thousands more received financial counseling, mortgage assistance, and other forms of support.

The success in Chicago has already prompted the FDIC to bring the NATF's innovations to other districts. Programs are underway in Charlotte/Raleigh, Boston, Austin, Kansas City and Los Angeles. More FDIC districts are scheduled to adopt similar initiatives.

Contact Information
Luke W. Reynolds
Division of Supervision and Consumer Protection
1333 S Mayflower Ave., Suite 450
Monrovia, CA 91016
(626) 359-7152 ex. 4115
lureynolds@fdic.gov

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